Opinion
W.C. No. 4-343-840.
November 15, 1999.
FINAL ORDER.
The respondent seek review of an order of Administrative Law Judge Wheelock (ALJ) which imposed penalties. We affirm the order in part, modify part of the order, set aside part of the order and remand for the entry of a new order.
I.
Section 8-43-203(1)(a), C.R.S. 1999 provides that within twenty days after notice of an injury which disables the claimant for more than three shifts or three calendar days, or results in permanent physical impairment, or death the respondent shall notify the Division of Workers' Compensation (Division) in writing whether liability is admitted or denied. If the respondent fails to comply with § 8-43-203(1), the respondent may be ordered to pay up to one day's compensation for each day's failure timely to notify the Division.
The claimant suffered a compensable injury on April 17, 1997, and as a result, was medically restricted from performing his regular employment. The claimant performed modified employment until May 11, 1997, when he was laid off. The respondent paid temporary total disability benefits commencing May 12, 1997, but did not file an admission of liability until July 16, 1997.
The ALJ imposed penalties at the rate of $66.92 per day from May 11, 1997 through July 16, 1997. In support, the ALJ found the respondent knew of the injury by April 18, 1997, that the claimant was subject to "significant restrictions" which limited him to modified employment and the respondent knew the claimant had time loss from work commencing May 11, 1997. (Finding of Fact 6).
On review the respondent contends that the ALJ erred in imposing penalties commencing May 11, 1997. We agree.
Section 8-43-203(1), does not require the respondent to admit or deny liability until the claimant has missed more than three work shifts. It follows that evidence of medical restrictions which preclude the claimant from performing his regular employment is insufficient to trigger the insurer's statutory duty to admit or deny liability unless no modified employment is available or the modified employment results in an accumulated time loss greater than three work shifts. See Ralston v Purina-Keystone v. Lowry, 821 P.2d 910 (Colo.App. 1991); Hall v. Boise Cascade Corp., W.C. No. 4-119-634 (May 12, 1993); Williams v. Leo Brumley, W.C. No. 4-108-733 (June 8, 1992); Brandt v. Wojcieck Moszynski, W.C. No. 3-194-443 (January 8, 1991).
Here, the record contains evidence the claimant regularly worked 40 hours a week and the modified employment was 32 hours a week. ( See Tr. pp. 88-89; 96; 153). It is also undisputed that no work was available commencing May 11, 1997. Therefore, the record contains substantial evidence to support the ALJ's finding that the claimant suffered a lost time injury by May 11, 1997.
Nevertheless, § 8-43-203(1) affords the respondent 20 days after notice of a lost time injury to admit or deny liability. Consequently, the respondent was not subject to penalties until June 1, 1997, and we modify the ALJ's order accordingly.
The respondent's further arguments have been considered and are without merit. The ALJ was not persuaded by the claimant's contention that the respondent should have known he sustained "permanent physical impairment," and the record does not compel a contrary determination. See Uptime Corp. v. Colorado Research Corp., 161 Colo. 87, 420 P.2d 232 (1966) (ALJ is not required to explicitly discuss defenses or theories he rejected).
II.
The Rules of Procedure, Part IV(N)(3), 7 Code Colo. Reg. 1101-3 at 6.02 requires the respondent to file an admission of liability for the termination of temporary disability benefits within twenty days of the respondent's "receipt of supporting documentation." Section 8-43-304(1), C.R.S. 1999, allows an ALJ to impose penalties up to $500 per day for the respondent's failure to comply with Rule IV. See Human Resource Company v. Industrial Claim Appeals Office, 984 P.2d 1194 (Colo.App. 1999).
The ALJ found the respondent unilaterally terminated temporary disability benefits on September 11, 1997. The respondent's claims administrator Ms. Colvin, admitted she unilaterally terminated temporary total disability benefits and that she did not prepare an admission of liability for the termination of benefits until October 15, 1997. The ALJ found the October 15 admission was not received by the Division until November 24, 1997. Further, the ALJ determined the respondent offered no reasonable basis for its violation of Rule IV(N)(3). Under these circumstances, the ALJ imposed penalties at the rate of $80 per day for 53 days.
The respondent contends that an admission may be filed by mail and that service by mail is effective on the date of mailing. The respondent also contends the claimant failed to prove the date the admission was actually mailed and the ALJ failed to make a finding concerning the date of mailing. Consequently, the respondent contends the ALJ erroneously imposed a penalty for the violation of Rule IV(N)(3) We disagree.
As argued by the respondent, it is the claimant's burden to prove his entitlement to penalties. See Postlewait v. Midwest Barricade, 905 P.2d 21 (Colo.App. 1995); Long v. DBF L.L.C., W.C. No. 4-264-006 (June 5, 1997). Assuming arguendo, that an admission for the termination of temporary disability benefits may be filed by hand delivery or mail, the claimant was not entitled to penalties unless he proved the respondent failed to timely hand deliver or mail an admission terminating temporary disability benefits. Once the claimant proved a violation, the burden shifted to the respondent to establish a date when the violation ended. See Postlewait v. Midwest Barricade, 905 P.2d 21 (Colo.App. 1995).
The respondent does not dispute the ALJ's finding that temporary disability benefits terminated September 11, 1997. Under these circumstances the respondent was required to file an admission for the termination of temporary disability benefits no later than October 1, 1997. The respondent does not assert that an admission of liability for the termination of temporary disability benefits was filed by mail or hand delivery before October 15, 1997. Therefore, the record supports the ALJ's implicit determination that the claimant proved a violation of Rule IV(N)(3). Moreover, the ALJ found the respondent failed to present persuasive evidence that the violation ended prior to November 24, 1997, and that determination is supported by the record.
Ms. Colvin stated that she prepared the October 15, 1997 admission, signed the certificate of mailing and put copies in envelopes addressed to the Division, the claimant and the claimant's attorney. However, she stated that she did not actually mail the admission. Instead Ms. Colvin stated that she put the envelopes in the departmental "out-box" for mailing. (Tr. pp. 150, 163). Further, Ms. Colvin admitted the possibility that the admission was not mailed because the person who normally handled the mail was out on strike. (Tr. p. 164). Thus, there is no presumption that the admission was mailed on October 15, 1997. Cf. Olson v. Davidson, 142 Colo. 205, 350 P.2d 338 (1960) (there is a presumption of receipt where the evidence shows that a document was mailed to the addressee at the correct address with prepaid postage).
The ALJ credited the claimant's testimony that neither he nor his attorney received the October 15 admission. Further, the ALJ reasonably inferred that the Division did not receive the admission until November 24, 1997, when it was date stamped. Under these circumstances, the ALJ's finding support his determination that the respondent's violation continued until November 24, 1997.
III.
Rule IV(N)(5), 7 Code Colo. Reg. 1101-3 at 6.03 states that "within 20 days after receipt of a determination of medical impairment from an authorized level II accredited physician" the respondent must either file an admission of liability consistent with the physician's opinion or request a Division-sponsored IME on the issue of medical impairment.
On September 15, 1997, Dr. Bergland placed the claimant at maximum medical improvement (MMI) with 30 percent whole person impairment. The respondent did not admit liability for permanent disability benefits. Instead the respondent requested a Division-sponsored IME to challenge Dr. Bergland's rating. However, the IME request was not filed until October 14, 1997. The ALJ imposed a penalties at the rate of $500 per day for 9 days on account of the respondents failure timely to comply with Rule IV(N)(5).
The respondent contends that Ms. Colvin did not receive Dr. Bergland's medical impairment rating until October 14, 1997, and then immediately requested an IME. Under these circumstances, the respondent argues the violation was "cured" and no penalties may be imposed for its violation of Rule IV(N)(5). We reject this argument.
The requirements of Rule IV(N)(5) are triggered when the self-insured employer receives the physician's report of medical impairment. Nothing in Rule IV(N)(5) conditions the respondent's liability on receipt by the specific adjuster assigned to the claim, and we may not read nonexistent provisions into the Rule. See Best-Way Concrete Co. v. Baumgartner, 908 P.2d 1194 (Colo.App. 1995).
The record supports the ALJ's finding that Dr. Bergland faxed a copy of his September 15, 1997 to the respondent on September 15, 1997. (Tr. pp. 49, 50). In fact the ALJ expressly credited Ms. Colvin's admission that she had the report which was faxed to the respondent. (Finding of Fact 8). Therefore, we must uphold the ALJ's implicit determination that the respondent received Dr. Bergland's medical impairment rating on September 15, 1997.
Section 8-43-304(4) provides that after the filing of an application for hearing on the issue of penalties:
"an alleged violator shall have twenty days to cure the violation. If the violator cures the violation within such twenty-day period, and the party seeking such penalty fails to prove by clear and convincing evidence that the alleged violator knew or reasonable should have known such person was in violation, no penalty shall be assessed."
In Adkinson v. National Rooter, W.C. No. 4-197-635 (August 11, 1995) we concluded that the plain language of § 8-43-304(4) does not require notice to an alleged violator prior to the time the penalty period commences. Rather, the statute presumes that a violation has occurred prior to any notice. We also concluded that the plain language of the statute does not purport to preclude imposition of a penalty for violations occurring prior to the time the violator received notice of the claim for a penalty. We adhere to our previous conclusions.
Accordingly, it follows that evidence the respondent requested an IME prior to March 12, 1998, the date of the claimant's Application for Hearing on the issue of penalties, did not preclude the ALJ from assessing penalties for the respondent's violation of Rule IV(N)(5) between September 15 and October 14, 1997. Therefore, we do not consider the respondent's further arguments concerning § 8-43-304(4).
Nevertheless, we conclude the ALJ's findings of fact are insufficient to permit appellate review of the respondent's contention that the ALJ's imposition of penalties at the rate of $500 per day was an abuse of discretion. An abuse of discretion occurs when an ALJ's order is beyond the bounds of reason, as where it is unsupported by the law or the facts. Coates, Reid Waldron v. Vigil, 856 P.2d 850 (Colo. 1993).
Although the amount of the penalty is discretionary up to $500 per day, the ALJ's findings must be sufficient to indicate the basis of the order. Riddle v. Ampex Corp., 839 P.2d 489 (Colo.App. 1992). Further, the findings should not be stated in a purely conclusionary form which affords no meaningful basis to review the findings. Womack v. Industrial Commission, 168 Colo. 364, 451 P.2d 761 (1969).
The ALJ imposed penalties at the rate of $500 per day based on the respondent's "failed explanation" for its violation of Rule IV(N)(5). (Finding of Fact 8). However, the absence of an objectively reasonable explanation for the respondent's violation is a prerequisite to the imposition of penalties under § 8-43-304(1). See Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, 907 P.2d 676 (Colo.App. 1995). Accordingly, the respondent's "failed explanation" for its violation is alone insufficient to ascertain the basis for the ALJ's imposition of penalties at the maximum penalty allowed by § 8-43-304(1).
On remand the ALJ shall enter a new order with specific findings to support the ALJ's conclusion concerning the appropriate daily rate of the penalties imposed for the respondent's violation of Rule IV(N)(5).
IT IS THEREFORE ORDERED that the ALJ's order dated November 4, 1998, is modified to require the respondent to pay penalties of $66.92 per day from June 1, 1997 through July 16, 1997.
IT IS FURTHER ORDERED that the ALJ's order is set aside insofar as it requires the respondent to pay penalties at the rate of $500 per day for 9 days, and the matter is remanded to the ALJ for the entry of a new order which is consistent with the views expressed herein. In all other respects the ALJ's order is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
_____________________________ Kathy E. Dean
_____________________________ Robert M. Socolofsky
NOTICE
This Order is final unless an action to modify or vacate this Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, CO 80203, by filing a petition for review with the court, with service of a copy of the petition upon the Industrial Claim Appeals Office and all other parties, within twenty (20) days after the date this Order is mailed, pursuant to section 8-43-301(10) and 307, C.R.S. 1999.
Copies of this decision were mailed November 15, 1999 to the following parties:
Alejandro Davila, Jr., 2601 8th Ave., Pueblo, CO 81003.
CFI Steel, L.P. d/b/a Rocky Mountain Steel Mills, P.O. Box 316, 1612 E. Abriendo, Pueblo, CO 81002-0316.
Carolyn Bjur, Corporate Manager of Workers' Compensation, Oregon Steel Mills, Inc., P.O. Box 5368, Portland, OR 97228-5368.
Catherine M. Higuera, Sedgwick Claims Management Services, Inc., P.O. Box 101268, Denver, CO 80250-1268.
Kathleen Pennucci, Subsequent Injury Fund — Interagency Mail.
Steven U. Mullens, Esq., 1401 Court St., Pueblo, CO 81003 (For Claimant).
Michael Goodman, Esq., 1700 Broadway, #1700, Denver, CO 80290-1701 (For Respondent).
BY: A. Pendroy